Business Rates - Fair or Unfair
Discussion
singlecoil said:
XMT said:
I have to say I am disgusted with this tax.
I took on a lease 2 years back and fortunatley for me It was under the threshold and therefore exempt.
I did contemplate looking at larger places which were infact just slightly more expensive but by the time you add in rates etc it became considerably more...
If you had looked into the small business rates relief scheme you would have found out that going slightly above the threshold would not have led to a large increase in the rates. The scale is a sliding one, there is no sudden increase.I took on a lease 2 years back and fortunatley for me It was under the threshold and therefore exempt.
I did contemplate looking at larger places which were infact just slightly more expensive but by the time you add in rates etc it became considerably more...
Im not complaining about the rejig though as my rates are down from £5.5k this year.
This is something i am having to deal with at the moment.
We have a old motorcycle shop with a large workshop at the rear. We no longer sell bikes (sell parts online) and have not done so since around 2007, the shop front has had mirror film over the windows and racked out with shelving with parts since 2007. We are getting stung on the rates as it is down as "retail zone" and set in 3 bands a,b and c.
Called the councill 2 years ago about it, got a visit to ask if it can be changed to stores only to be told NO as if you were to sell the property it would be advertised as a shop.
We were getting some relief off the rates so did not put up much of a fight, now we have gone up from £11,000 to £17,750 taking us over the new relief! I have called up about it but can not do anything until april when we go onto the new price.
We are needing to move and found 2 ideal places but the crippling rates has just made it not viable, so no i don't think it is fair to be honest.
We have a old motorcycle shop with a large workshop at the rear. We no longer sell bikes (sell parts online) and have not done so since around 2007, the shop front has had mirror film over the windows and racked out with shelving with parts since 2007. We are getting stung on the rates as it is down as "retail zone" and set in 3 bands a,b and c.
Called the councill 2 years ago about it, got a visit to ask if it can be changed to stores only to be told NO as if you were to sell the property it would be advertised as a shop.
We were getting some relief off the rates so did not put up much of a fight, now we have gone up from £11,000 to £17,750 taking us over the new relief! I have called up about it but can not do anything until april when we go onto the new price.
We are needing to move and found 2 ideal places but the crippling rates has just made it not viable, so no i don't think it is fair to be honest.
singlecoil said:
Do you mean that it's not viable to move, or it's not a viable business at all?
Not viable to move, or to put it another way it is an "cost of doing business" i am not prepared to pay for or i don't think it is "value for money" In other words we will have to make the best of the space we have as moving to somewhere that is 50% bigger does not equate to 50% more council tax is it like 150% more tax
chippy348 said:
This is something i am having to deal with at the moment.
We have a old motorcycle shop with a large workshop at the rear. We no longer sell bikes (sell parts online) and have not done so since around 2007, the shop front has had mirror film over the windows and racked out with shelving with parts since 2007. We are getting stung on the rates as it is down as "retail zone" and set in 3 bands a,b and c.
Called the councill 2 years ago about it, got a visit to ask if it can be changed to stores only to be told NO as if you were to sell the property it would be advertised as a shop.
We were getting some relief off the rates so did not put up much of a fight, now we have gone up from £11,000 to £17,750 taking us over the new relief! I have called up about it but can not do anything until april when we go onto the new price.
We are needing to move and found 2 ideal places but the crippling rates has just made it not viable, so no i don't think it is fair to be honest.
Brick up the windows?We have a old motorcycle shop with a large workshop at the rear. We no longer sell bikes (sell parts online) and have not done so since around 2007, the shop front has had mirror film over the windows and racked out with shelving with parts since 2007. We are getting stung on the rates as it is down as "retail zone" and set in 3 bands a,b and c.
Called the councill 2 years ago about it, got a visit to ask if it can be changed to stores only to be told NO as if you were to sell the property it would be advertised as a shop.
We were getting some relief off the rates so did not put up much of a fight, now we have gone up from £11,000 to £17,750 taking us over the new relief! I have called up about it but can not do anything until april when we go onto the new price.
We are needing to move and found 2 ideal places but the crippling rates has just made it not viable, so no i don't think it is fair to be honest.
jamoor said:
rick up the windows?
At the time, the guy with the clip board said "made no difference" When i called up begining of this year i said shall i apply for change of use ? they did not know. It looks like i have to wait until April to do anything about it, were were planning on splitting it up into 3 shops / units and renting it out then moving back onto an industrial estate, this may happen sooner rather than later.
chippy348 said:
singlecoil said:
Do you mean that it's not viable to move, or it's not a viable business at all?
Not viable to move, or to put it another way it is an "cost of doing business" i am not prepared to pay for or i don't think it is "value for money" In other words we will have to make the best of the space we have as moving to somewhere that is 50% bigger does not equate to 50% more council tax is it like 150% more tax
The rates are based on the rent and at worst will only be about half the rent.
singlecoil said:
But surely if you are moving from retail premises to an industrial unit it will be cheaper for more space?
The rates are based on the rent and at worst will only be about half the rent.
You are correct industrial would be cheaper and that is a rout i may have to go back to but not rent freehold. The rates are based on the rent and at worst will only be about half the rent.
The 2 properties i looked at were garages with some showroom space and it is this that hikes up the rates.
Why is it like that surely 10,000 sq foot unit or 10,000 sq of mixed space, office, workshop, retail is the same so why the different tax band ? This is the bit that i think is unfair.
What do you get more for your £££ better road swept with a gold brush, better quality of air? from what i can see you get the same.
chippy348 said:
You are correct industrial would be cheaper and that is a rout i may have to go back to but not rent freehold.
The 2 properties i looked at were garages with some showroom space and it is this that hikes up the rates.
Why is it like that surely 10,000 sq foot unit or 10,000 sq of mixed space, office, workshop, retail is the same so why the different tax band ? This is the bit that i think is unfair.
What do you get more for your £££ better road swept with a gold brush, better quality of air? from what i can see you get the same.
This is another way where the likes of amazon totally destroy the high street.The 2 properties i looked at were garages with some showroom space and it is this that hikes up the rates.
Why is it like that surely 10,000 sq foot unit or 10,000 sq of mixed space, office, workshop, retail is the same so why the different tax band ? This is the bit that i think is unfair.
What do you get more for your £££ better road swept with a gold brush, better quality of air? from what i can see you get the same.
Amazon have a warehouse in the middle of nowhere, a high street department store in prime city centre location.
The high rent is one thing, the business rates linked to the rent is the kick in the teeth.
Corporation tax is ok, if you make money then you can pay it, rates are a completely unreasonable fixed cost.
Ahhh business rates my specialist subject. One that will happen as a result of the revaluation is a huge increase in the marketing by those offering to appeal it for you. Take extreme care there is going to be a total change in the rules as to how to appeal which will make life more difficult.
The rateable value is meant to represent the rental value of a property as at 1 April 2008 for the current list and 1 April 2015 for the one that comes into force in April. Arguably it is the rate in the pound that is the issue. When the current system came in it was about 33p, now its about 50p so rates are half the rent.
There might be an argument to say that a shop which is no longer used as one should not be zoned, but it depends on the circumstances, and can be a hard one to win
The rateable value is meant to represent the rental value of a property as at 1 April 2008 for the current list and 1 April 2015 for the one that comes into force in April. Arguably it is the rate in the pound that is the issue. When the current system came in it was about 33p, now its about 50p so rates are half the rent.
There might be an argument to say that a shop which is no longer used as one should not be zoned, but it depends on the circumstances, and can be a hard one to win
Its unfair, any business is already paying tax many times in many different ways.
All it does is stifle growth, I have seen first hand many businesses that are too large for the current premises that will not move to bigger because they would lose the small business rate relief.
So, places that would grow and employ more people and make/do more work and would earn the Govt. more money with their increased activities simply don't.
Small village/town general store type shops that used to support a couple and their children and bring communities together have all but vanished from our area and business rates is the reason, its not viable as a business to work long hours to pay the Govt. rather than yourselves. Such shops are turned into houses or holiday lets so there is a loss of local convenience stores and a community focal point. Now everyone has to drive to a supermarket.
I detest business rates because it does not take into account the state of the business or the ability of the operators to pay, its a fixed cost no matter if you are mega successful or failing, I would object less to paying more tax on my profits, that's a much fairer way of doing it, do more business and pay more tax.
Give the incentive to the people, less stick, more carrot.
All it does is stifle growth, I have seen first hand many businesses that are too large for the current premises that will not move to bigger because they would lose the small business rate relief.
So, places that would grow and employ more people and make/do more work and would earn the Govt. more money with their increased activities simply don't.
Small village/town general store type shops that used to support a couple and their children and bring communities together have all but vanished from our area and business rates is the reason, its not viable as a business to work long hours to pay the Govt. rather than yourselves. Such shops are turned into houses or holiday lets so there is a loss of local convenience stores and a community focal point. Now everyone has to drive to a supermarket.
I detest business rates because it does not take into account the state of the business or the ability of the operators to pay, its a fixed cost no matter if you are mega successful or failing, I would object less to paying more tax on my profits, that's a much fairer way of doing it, do more business and pay more tax.
Give the incentive to the people, less stick, more carrot.
singlecoil said:
As for not forgetting small business rates relief, I've actually drawn attention to it twice in this thread.
Small business rate relief is still based on the rates valuation of the property so won't be nil if the annual rent is over £18,000 which I suspect does not get you a lot of highstreet shop, even then between 12k and 18k the available relief is something like 2p off the standard rate, better than nothing but not much.Business Rates probably seemed reasonable at inception, getting occupiers of premises to contribute to local infrastructure and services etc.
However it is totally inappropriate to the commercial landscape today for the government to force bricks and mortar occupiers to pay a fixed cost (in the region of half of what they pay in rent), when otherwise-identical online businesses do not pay.
Corporation Tax which should smooth this situation if online businesses make more profit than bricks and mortar, and hence pay more tax. IF they pay, which many high-profile ones do not, but that's another discussion.
However it is totally inappropriate to the commercial landscape today for the government to force bricks and mortar occupiers to pay a fixed cost (in the region of half of what they pay in rent), when otherwise-identical online businesses do not pay.
Corporation Tax which should smooth this situation if online businesses make more profit than bricks and mortar, and hence pay more tax. IF they pay, which many high-profile ones do not, but that's another discussion.
If I was arguing on behalf of the government (which I am not, I don't think business rates are more or less 'unfair' than any other tax) I would say that it's the ideal tax. And the reason from the government's point of view is that buildings are not easily hidden. So they can be taxed.
If people are able to run businesses and make money without having premises then that's exactly what they should do. If they are able to manage in smaller premises that they would like, then that's what they should do too.
The main costs to any conventional business are stock and staff. Rates are some way down the list. As someone said earlier, if a business becomes unviable because of rates then it's unviable anyway.
If people are able to run businesses and make money without having premises then that's exactly what they should do. If they are able to manage in smaller premises that they would like, then that's what they should do too.
The main costs to any conventional business are stock and staff. Rates are some way down the list. As someone said earlier, if a business becomes unviable because of rates then it's unviable anyway.
A number of years ago I investigated the cost of having a shop in my local town. After getting an idea of the business rates I wondered how I'd ever make enough to feed myself and quickly abandoned the idea. The town now consists almost exclusively of estate agents, banks and charity shops.
MitchT said:
A number of years ago I investigated the cost of having a shop in my local town. After getting an idea of the business rates I wondered how I'd ever make enough to feed myself and quickly abandoned the idea. The town now consists almost exclusively of estate agents, banks and charity shops.
You see, this is what I just don't get. What was it that you were going to sell, that the rates, and rates alone, were going to kill the idea? What about the stock, the staff, the rent, the insurance etc?singlecoil said:
If I was arguing on behalf of the government (which I am not, I don't think business rates are more or less 'unfair' than any other tax) I would say that it's the ideal tax. And the reason from the government's point of view is that buildings are not easily hidden. So they can be taxed.
If people are able to run businesses and make money without having premises then that's exactly what they should do. If they are able to manage in smaller premises that they would like, then that's what they should do too.
The main costs to any conventional business are stock and staff. Rates are some way down the list. As someone said earlier, if a business becomes unviable because of rates then it's unviable anyway.
I totally disagree with this. If people are able to run businesses and make money without having premises then that's exactly what they should do. If they are able to manage in smaller premises that they would like, then that's what they should do too.
The main costs to any conventional business are stock and staff. Rates are some way down the list. As someone said earlier, if a business becomes unviable because of rates then it's unviable anyway.
Staff, stock you make money from these. Insurance you can have minimal to comprehensive cover with a wide range of costs. Rent a necessary unless you buy, but you do get something for your money there is a value to it.
So what value does Business rates add to your business?
It is a tax that gives very little back in return and a tax that is always on the increase and as other have said holds growth back.
chippy348 said:
singlecoil said:
If I was arguing on behalf of the government (which I am not, I don't think business rates are more or less 'unfair' than any other tax) I would say that it's the ideal tax. And the reason from the government's point of view is that buildings are not easily hidden. So they can be taxed.
If people are able to run businesses and make money without having premises then that's exactly what they should do. If they are able to manage in smaller premises that they would like, then that's what they should do too.
The main costs to any conventional business are stock and staff. Rates are some way down the list. As someone said earlier, if a business becomes unviable because of rates then it's unviable anyway.
I totally disagree with this. If people are able to run businesses and make money without having premises then that's exactly what they should do. If they are able to manage in smaller premises that they would like, then that's what they should do too.
The main costs to any conventional business are stock and staff. Rates are some way down the list. As someone said earlier, if a business becomes unviable because of rates then it's unviable anyway.
Staff, stock you make money from these. Insurance you can have minimal to comprehensive cover with a wide range of costs. Rent a necessary unless you buy, but you do get something for your money there is a value to it.
So what value does Business rates add to your business?
It is a tax that gives very little back in return and a tax that is always on the increase and as other have said holds growth back.
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